Directors
of glazier and aluminium joinery company Aluminium Plus Wellington Ltd were
ordered to pay $125,800 damages for negligence after favouring beneficiaries of
their own family trust over claims by company creditors when they abandoned a
funding agreement.
The High Court was told Ian Alexander
Shaw and Angela Claire Shaw had traded as the Shaw Family Trust first in a
farming venture and then since 2007 as a glazing company under the name
Aluminium Plus. Most suppliers were
comfortable dealing with the Shaws as a Trust, but major supplier CSR Viridian
demanded invoices be charged to a corporate.
The Shaws set up Alumnium Plus Wellington Ltd as a shell company to
process Viridian invoices. Viridian
product was delivered to the Trust, invoices went to Aluminium Plus Wellington Ltd
and the Trust made payment out of its own bank account. Unpaid for deliveries in late 2013, Viridian
sued, eventually putting Aluminium Plus Wellington Ltd into liquidation. The liquidators sued Mr and Mrs Shaw as the
company’s directors for negligence. Their
company was solvent provided funding arrangements with the Trust had
continued. Justice Brown ruled the Shaws
as directors were negligent in cancelling the funding arrangement agreed with
themselves as trustees of their family Trust.
They were held liable for all the company’s unpaid debts, including
costs of the liquidation.
Owens
v. Shaw – High Court (24.06.16)
16.097